Brexit chaos should not distract from cleaning up Britain's property sector

It’s only March, but
2019 is already looking like a bumper year for money laundering.

As the Danske Bank
scandal spreads to more and more countries, and the Troika Laundromat drags in Prince
Charles’s foundation, elite private schools, and many others, the urgency of
this issue could not have been made more obvious.

But just as the
horrifying scale of this corruption crisis has come into view, the green shoots
of change are finally beginning to appear, as the UK Parliament prepares to
review draft legislation on a beneficial ownership register for British
property owned by foreign anonymous companies. This has been a long time
coming, but despite considerable political headwinds (ahem, Brexit), the goal
is finally in sight.

However, our latest
analysis shows that the problem remains as pressing as ever. We found that
87,000 properties in England and Wales were owned by anonymous companies
registered in tax havens – an almost identical number to when we last measured
in 2017. The total value of these properties, which are mostly clustered in the
priciest parts of central London, is at least £56 billion according to Land
Registry data – but it could be as much as double that once inflation and
missing price data are taken into account. Even in this turbulent time, we
cannot let political turmoil hinder real progress towards cleaning up our dirty
property market.

Global
Witness’ investigations have repeatedly shown that the ease at which the wealthy
can buy and sell UK property under complete anonymity is red meat to
kleptocrats and criminals. Last year, the National Crime Agency unmasked Zamira
Hajiyeva, the wife of an Azeri banker jailed for defrauding his country’s state-owned
bank out of hundreds of millions. Via companies based in Guernsey and the
British Virgin Islands, Hajiyeva purchased an £11.5m five-bedroom property in
Knightsbridge, gold and a country club in Ascot.

Her
lavish spending at Harrods made headlines, but barely scratches the surface of
dirty money in the UK. The Hajiyeva mansion is just one of 5,729 anonymously
owned properties in Kensington & Chelsea. The NCA estimates that, all told,
the scale of money laundering in the UK could be in the hundreds of billions of
pounds.

Given
the astonishing size of the problem, it’s vital that this important issue is
not overlooked as lawmakers find themselves occupied with the vagaries of
Brexit.

Today,
a Parliamentary committee will review a draft law that would compel companies
incorporated overseas to publicly register their beneficial ownership with
Companies House. Such a system could finally force secret owners into the light,
with criminal sanctions and fines for those who fail to comply with the regime.

The
proposals, which have cross party support, would be the first of their kind in
the world – a strong statement of values as the UK establishes its place in a post-Brexit world
order.

The
Government has promised to table the full bill this Summer, but as our new
analysis shows, the urgency of these issues cannot be stressed enough.

Establishing
a properly resourced and well-policed register of the real ownership of UK
property would be a huge step towards cleaning up the UK’s dirty money habit –
and might even go some way to redressing the resentment which pervades our divided
country.